We permit the publication of our auditors’ report, provided the report is published in full only and is accompanied by the full financial statements to which our auditors’ report relates, and is only published on an access-controlled page on your website https://www.hermes-investment.com, to enable users to verify that an auditors’ report by independent accountants has been commissioned by the directors and issued. Such permission to publish is given by us without accepting or assuming any responsibility or liability to any third party users save where we have agreed terms with them in writing.

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PricewaterhouseCoopers LLP (“PwC”) accepts no liability (including liability for negligence) to each recipient in relation to PwC’s report. The report is provided to each recipient for information purposes only. If a recipient relies on PwC’s report, it does so entirely at its own risk;

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PwC’s report was prepared with Hermes Property Unit Trust's interests in mind. It was not prepared with any recipient's interests in mind or for its use. PwC’s report is not a substitute for any enquiries that a recipient should make. The financial statements are as at 25 March 2017, and thus PwC’s auditors’ report is based on historical information. Any projection of such information or PwC’s opinion thereon to future periods is subject to the risk that changes may occur after the reports are issued and the description of controls may no longer accurately portray the system of internal control. For these reasons, such projection of information to future periods would be inappropriate.

Hermes Investment Management is one of the largest institutional asset managers in the UK. We offer actively managed public and private markets solutions to investors across the world and, in Hermes EOS, have one of the world’s largest stewardship resources.

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Hermes Global Equity

Objective: aiming to achieve long-term capital appreciation by investing primarily in equity securities which are components of the MSCI World Index, or companies listed in countries referenced in this index

"We assess each stock's value, growth and quality characteristics, along with market sentiment towards the company, to find those with the optimum combinations."

Investment approach

We like stocks with robust financial statements, competitive strength and a proven ability to consistently beat revenue and earnings expectations. Ideally, these companies should also be guided by impressive management teams, mitigate ESG risks and appear cheap relative to peers. But very few stocks embody such an ideal investment. So we identify those with the most attractive combinations of characteristics in every market environment.

Systematic analysis

A systematic model, capturing the same data as a fundamental investment analyst, assesses the attractiveness of every stock in the investment universe each day. The metrics used to select stocks are justified by both economic reasoning and statistical effectiveness, and have a long-term focus that leads to low portfolio turnover. They are grouped by valuation, sentiment, growth, profitability, corporate behaviour and capital structure. This model creates an optimised portfolio that aims to maximise risk-adjusted returns.

Risk management

The portfolio is subjected to two levels of risk analysis. First, MultiFRAME, our proprietary risk-management system, assesses top-down market risk. It has the flexibility to stress-test the portfolio, interpret how it would respond to different market environments and measure its exposure to any quantifiable risk. Second, we perform a bottom-up ‘sense check’ to ensure that the model has accurately assessed the nuances of each potential investment. At this stage, the ESG Dashboard, another proprietary tool, alerts us to stock-specific environmental, social and governance risks not typically covered in fundamental analysis of companies.

1. Since inception on 01 December 2007 the Hermes Global Equity Strategy has outperformed the MSCI World Net index by 1.40% on an annualised basis as at 31 March 2017. Performance shown is in USD and is gross of fees. A full GIPS disclosure report is available on the latest strategy factsheet.

Past performance is not a reliable indicator of future results and targets are not guaranteed.